V. Michael Ferdinandi's prescription for talent management, leadership training and tight business partnership helped to create a strong CVS Caremark during its feverish expansion.
When he walked through the doors of Woonsocket, R.I.-based CVS Corp. 10 years ago, V. Michael Ferdinandi had his work cut out for him. Only two years before, the company had acquired 2,500 stores from Revco, a rival retail-pharmacy chain based in Twinsburg, Ohio.
What's more, CVS had plans to expand much further in a short amount of time. It was great news for the business; it was a headache for Ferdinandi. There were different corporate cultures and different management styles to bring together. It wasn't exactly chaos, says Ferdinandi, but neither was it good business.
"We realized that we could not continue to grow the company unless we had a [training program] that produced ready talent," says Ferdinandi.
Under his supervision, training was specifically designed to infuse the CVS way of doing business into acquired organizations practically from the moment they were acquired. Recognizing a link between contented employees and satisfied customers, he created an employee satisfaction survey to gauge and foster satisfaction in the workplace that produces steadily higher marks.
Now known as CVS Caremark after CVS's 2007 merger with Caremark Rx Inc., the company has blossomed into the largest pharmacy chain in the nation, according to online business database Hoover's, adding nearly 3,000 more stores since its Revco acquisition, along with about 100,000 new employees. (To date, the employee count nears 250,000.)
For the part he played in elevating the human resource function during such rapid growth and proving his value as a business partner through the process, Ferdinandi has been named one of this year's HR Honor Roll inductees.
To ensure rapid alignment of newly merged company cultures, Ferdinandi helped to design, and still oversees, the Emerging Leaders Program, a series of management training courses that instill the company's stamp on everything, from how CVS Caremark fills prescriptions to the value it places on customer service.
The year-long coursework combines classroom activities taught at corporate headquarters, as well as on-the-job activities that are coordinated with each employee's manager.
It took a couple of years to put together the right mix of courses, says Ferdinandi. "We spent a lot of time up front really understanding the skills and the competencies necessary to drive performance," he says.
Ferdinandi credits the Emerging Leaders Program with increasing the bench strength of talent in the organization -- a virtual jump team of cultural ambassadors who could step in with each acquisition. It also fosters an outstanding retention rate among field managers, he says, adding that he can't recall losing a single field manager in the last seven or eight years -- long before the economy crumbled.
Ferdinandi also spearheaded an engagement program called Stay, Say and Serve shortly after his arrival, and continues to make refinements to the initiative. Items that are tracked through the program's survey include questions about continuing interest in working for the company, pride in the company and dedication to customer service. Results of the survey are then shared with managers and pharmacists, who then work on maintaining or improving engagement with employees.
"At the end of the day, it really is ... the manager or team leader who drives engagement on the team, and [influences] how they interact with the customer," he says.
Fred Foulkes, director of the Human Resources Policy Institute at Boston University's School of Management, is not only familiar with Ferdinandi's accomplishments at CVS Caremark, but also knows him through membership in the Institute. According to Foulkes, Ferdinandi has the knack of balancing a keen understanding of business objectives with a personal touch that pays off, in the boardroom and in the field.
Foulkes notes that Ferdinandi's ability to align HR with CVS Caremark's business objectives has helped to support the innovation and productivity that has led to such successful ventures as in-store clinics and customer-loyalty cards.
Indeed, one of Ferdinandi's most personally satisfying achievements has been HR's growing partnership with the business objectives. Before his arrival, he says, HR was viewed as more of a transactional function -- a mere cog in the wheel that provided services such as payroll and benefits.
"In fact, before I came here, HR in our retail environment actually reported totally [to regional managers], with no connection to an HR infrastructure," he says. Bad medicine for sound business, he adds.
So, he eventually began outsourcing some of the more transactional services in HR and concentrated on building a centralized department that manages talent, engagement, recruitment and culture, while aligning it closer to the organization's business strategy. By outsourcing, he says, he also saved the company the "tens of millions of dollars" it would have cost to upgrade the HR infrastructure in order to keep pace with the company's rapid expansion.
"I think that's the thing I would look back on and say, 'To leave an organization in a much different place in terms of how HR is viewed and how HR is contributing to the success of the business,' " he says, is his proudest achievement.
Leaving? Ferdinandi's not likely to go anywhere, if Thomas Ryan, president, CEO and chairman of the board for CVS Caremark, has anything to say about it.
"Mike and his team have played a critical role in integrating nearly 100,000 new employees into the CVS Caremark organization over the past 10 years through our acquisitions and the merger with Caremark," he says. "They have contributed significantly toward our company, truly achieving one winning culture, a culture that rewards results."
As for future challenges, Ferdinandi says, he has plenty ahead to occupy his time and talents, primarily in balancing a healthy culture with a robust business and in preserving its "important characteristics, which enable us to drive [those] results."